WILKES-BARRE — This is an official press release from the U.S. Department of Justice (USAO - Pennsylvania, Middle), published as received.
WILKES-BARRE - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a federal jury in Wilkes-Barre found Joseph P. Donahue, age 60, guilty of knowingly failing to surrender for service of a federal sentence pursuant to a court order, being a felon in possession of a firearm, being a fugitive from justice in possession of a firearm, and possession of a stolen firearm after a seven-day trial. The case was tried before United States District Court Judge E. Richard Caputo. Sentencing is scheduled for December 7, 2015.
According to United States Attorney Peter Smith, Donahue was previously convicted in March 2010 of sixteen felony counts including bank fraud, money laundering, false statements and credit card fraud after a two week trial. On December 2, 2010, United States District Court Judge James M. Munley sentenced Donahue to 121 months’ incarceration and ordered Donahue to surrender himself to begin serving that sentence on January 4, 2011. Donahue failed to report to a previously designated federal facility and a warrant for his arrest was issued. He was apprehended on January 20, 2011 by United States Marshals in Los Cruces, New Mexico while operating under an assumed identity. He possessed a firearm at the time of his arrest.
Donahue testified at trial. Donahue’s defense, in part, was that he failed to surrender to begin serving his sentence because he feared that he was being unfairly prosecuted by the government and he denied any knowledge concerning the firearm. The jury received the case Tuesday afternoon, September 1, 2015 and returned a verdict of guilty on all counts after deliberating approximately 3 hours.
The evidence at the 2010 trial proved that Donahue enlisted and recruited shareholders, investors and partners in various businesses that the defendant owned and controlled, offering them, in exchange for their paying a share of the operating expenses, a share in the profits of the particular business. With the knowledge of his partners, Donahue obtained credit cards from various financial institutions, putting the credit cards in the names of the investors, for the purpose of paying for the operating expenses of a particular corporation that the defendant owned and controlled.
Unbeknownst to the investors, however, Donahue obtained additional credit cards and loans from financial institutions in their names by obtaining on-line credit card applications and by forging their names on the applications, identifying corporations unknown to the partners. Donahue then use these fraudulently-acquired credit cards to incur expenses to which the investors had not consented and for which they would be liable. By forging the investors= names to loan applications, Donahue also committed bank fraud and money laundering.
Donahue was also previously convicted after a 1989 federal trial of conspiracy and failure to comply with monetary instrument reporting requirements. That trial involved evidence that Donahue conspired with drug trafficker Frederick “Rik” Luytjes to smuggle millions of dollars out of the United States while avoiding monetary reporting requirements and tax consequences for Luytjes. United States District Court Judge Richard P. Conaboy sentenced Donahue to a two year term of imprisonment for those crimes.
The investigation was a collaborative effort between the United States Marshals Service and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Todd K. Hinkley and Michelle L. Olshefski.
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